Sergio Mendes Costa v Dissociadid Ltd & Anor

This is an appeal against three case management orders (as explained in more detail below) made by HHJ Hacon in the Intellectual Property Enterprise Court (“IPEC”). The appeal is brought with the permission of Nugee LJ granted on 9 December 2024.

The appellant, Sergio Mendes Costa (“Mr Costa”) is the claimant in an action against the respondents to this appeal, Dissociadid Ltd and Chloe Wilkinson (the “Defendants”). Mr Costa claims infringement of his copyright in certain works (the “Works”) that he provided in connection with a YouTube channel set up by Ms Wilkinson used for raising awareness about dissociative identity disorder, from which she suffers, and for providing help and support to others with that condition. One of the Works was a text identified as the “Disclaimer”, included in the description of most videos on the Defendants’ YouTube channel. Dissociadid Ltd is the company through which Ms Wilkinson carries on these business activities.

Mr Costa had, from about February 2021, submitted requests to YouTube that they take down the material in which he claimed copyright. On 24 February 2021, YouTube took down 24 video pages, some (or perhaps all) of which were reinstated on 11 March 2021, as a consequence of counter-notices filed by the Defendants.

At some point between 28 April 2021 and 13 May 2021, YouTube took down again all the videos it had previously reinstated, informing the Defendants that it would not act on counternotices until such time as the legal proceedings between the Defendants and Mr Costa were resolved.

On 25 June 2021, YouTube took down a further 49 videos, 46 of them because of Mr Costa’s allegations about the Disclaimer.

The Defendants counterclaimed for the damage they suffered from Mr Costa’s actions, contending that it constituted the tort of causing loss by unlawful means.

On 22 July 2022, HHJ Hacon, sitting in the IPEC, handed down judgment in which he found that the Defendants had infringed Mr Costa’s copyright in some, but not all, of the Works.

The Defendants’ counterclaim was partially successful. The judge found that Mr Costa had made continuing misrepresentations to YouTube that he had co-authored the Disclaimer. He found that Mr Costa knew, as from 13 March 2021, that this representation was false. Accordingly, at §149 of the judgment, the judge held that the Defendants are entitled to claim only in relation to videos taken down in response to a request relating to the Disclaimer after 13 March 2021.

In the order of 10 November 2022 giving effect to his judgment (the “10 November Order”), the judge made the following declaration:

“The Counterclaim is successful so far as it is founded upon the tort of unlawful interference in relation to those URLs disabled by YouTube on or about 25 June 2021 on the basis of “takedown requests” lodged in respect of the Disclaimer”.

HHJ Hacon adjourned the assessment of the Defendants’ loss under the counterclaim, to be heard alongside an inquiry regarding the Defendants’ infringement of copyright (although the latter did not ultimately proceed).

The Defendants initiated quantum proceedings in July 2023. Mr Costa contended that the scope of the quantum claim is too broad and would have the effect of extending Mr Costa’s liability to cover the Defendants’ lost advertising revenue arising from URLs disabled long after and long before the date specified in the 10 November Order. He also contended that the quantum proceedings seek damages for alleged lost sponsorship arising from upload restrictions applied by Google, which were not proven, pleaded or even mentioned at the liability stage of the proceedings. These points were advanced in Mr Costa’s defence in the quantum proceedings.

By an order dated 19 January 2024, HHJ Hacon vacated the case management conference which had been scheduled in the quantum proceedings and ordered that the question of quantum would be determined on the papers. In fact, that had been agreed between the parties. The Order stated:

“Neither party may rely on any further submissions or documents in the assessment of quantum without permission of the Court. Permission to rely on such further submissions or documents must be sought by way of an application, on notice, made no later than 2 weeks from the date of order.”

In the absence of such an application being made, the Defendants were required, within three weeks of the date of the order, to propose an index of documents and authorities relied on, considered necessary for the Court to give judgment. Mr Costa then had a week to provide proposed amendments to the index of documents, or confirmation that it was agreed. The Defendants then had a further week to file and serve the bundle, and the Court would give judgment on the quantum proceedings within a period of a further six weeks.

Shortly afterwards, the judge contacted the parties to say that he had taken the view that he could not reach a conclusion on quantum without the Defendants replying to the matters raised in Mr Costa’s points of defence. He sought further, short, reply submissions from the Defendants and gave Mr Costa an opportunity to provide a further short written response.

The Defendants provided their response to the points of defence on 31 May 2024. By an order dated 13 June 2024, HHJ Hacon permitted Mr Costa to provide any further written submissions in response (limited to 15 pages) by 31 July 2024.

On 16 June 2024, Mr Costa sent a request for information in respect of the Defendants’ response to the points of defence. The Defendants provided a response on 27 June 2024, mostly refusing the requests made on the basis that they were impermissible requests for disclosure or for evidence.

On 1 July 2024, Mr Costa issued an application (the “1 July Application”). In box 3 of the application notice, indicating the order sought, he stated only that the application was to strike out the Defendants’ points of claim and response to the points of defence (being those parts which attempted to extend his liability). He contends that he was prevented, because of the built-in character limit on the downloaded form of application notice, from including the other parts of the order he sought, namely: (1) an order requiring the Defendants to provide further information and disclose documents in accordance with his request for information of 16 June 2024; and (2) a variation of the order of 13 June 2024, by extending time for Mr Costa’s final submissions until 28 days after the Defendants had provided the further information. The draft order enclosed with the application notice contained, however, all of these heads of relief. Under box 6 of the application notice, Mr Costa sought to have the application dealt with at a remote hearing.

Mr Costa’s witness statement in support also referred to all of the heads of relief sought.

The Defendants filed a responsive witness statement of Mr Harker (a senior associate at the Defendants’ solicitors), dated 8 July 2024, responding to each part of the 1 July Application. Mr Harker said that the Defendants opposed determination of the 1 July Application at a hearing, because that was “unnecessary, atypical in this tribunal, and a further example of [Mr Costa’s] costs-inflating conduct”. He also said that the Defendants sought their costs of the application on the indemnity basis, on the basis of unreasonable conduct.

Mr Costa filed a further witness statement in reply dated 10 July 2024.

On the same date, 10 July 2024, Mr Costa sent a further request for information. The Defendants answered on 19 July 2025, declining to provide the information on the grounds that it was, again, an impermissible request for disclosure or for evidence and was disproportionate.

The judge dealt with the 1 July Application on the papers by his order of 15 July 2024 (the “15 July Order”), which dismissed the application and required Mr Costa to pay £2,500 in respect of the Defendants’ costs. In the reasons he gave for that order, he noted that – although the evidence filed with the 1 July Application referred to a request for further information and a wish to vary the order of 13 June 2024 – the application itself sought only an order striking out parts of the Defendants’ points of claim. As to the substance of that application, after noting Mr Costa’s claim that parts of the Defendants’ claim went outside the relief available pursuant to the defence and counterclaim served in the main proceedings, and the judgment of 22 July 2022, the judge concluded that the Defendants’ claim was not an abuse of process, nor likely to obstruct the just disposal of the proceedings. Nor was there any rule, practice direction, or order of the court which disallowed his claims.

In the recitals to the order, the judge commented that the application was “so lacking in merit that it constitutes unreasonable behaviour on the part of the Claimant within the meaning of CPR 63.26(2)”. CPR 63.26(2) enables the court to make an order for costs at the conclusion of a hearing where a party has behaved unreasonably, as an exception to rule 63.26(1), under which the court will reserve costs of an application to the end of the trial.

In relation to the matters of which Mr Costa complained, but did not fall within the scope of the 1 July Application (according to the face of the application notice), the judge said that Mr Costa could pursue his requests for further information at the CMC in the damages inquiry, and reminded the parties that the order of 13 June 2024 (requiring Mr Costa’s final submissions by 31 July 2024) remained in force and had not been varied.

On 19 July 2024, Mr Costa made a further application (the “19 July Application”). The draft order annexed to the application notice sought orders that: (1) HHJ Hacon recuse himself from the proceedings; (2) the 15 July Order be set aside; (3) the order of 16 June 2024 and the 15 July Order, and the quantum proceedings, be stayed until the present application was resolved; (4) the 1 July Application be granted and (5) the Defendants be ordered to provide the further information requested on 16 June 2024 and 10 July 2024. Mr Costa requested that the application be dealt with at a hearing, but he also filed written submissions in support.

By his order of 29 July 2024 (the “29 July Order”), HHJ Hacon: (1) dismissed the applications to set aside or stay the 15 July Order and to stay the order of 13 June 2024; (2) refused permission to appeal the 15 July Order; and (3) stayed the application to recuse himself, on the grounds that it was not in accordance with the overriding objective to determine that application pending the outcome of Mr Costa’s application to the Court of Appeal for permission to appeal the 15 July Order. The judge explained that he did not consider a hearing was necessary in view of the nature of the application and the extensive witness statements filed by Mr Costa. The judge commented that Mr Costa had not provided any cogent reason why he could not comply with the obligation to file final submissions by 31 July 2024 (in accordance with paragraphs 1 and 2 of the order of 13 June 2024) or to pay the costs ordered by paragraph 2 of the 15 July Order.

On 30 July 2024, Mr Costa made a further application, seeking an extension of time to file his final submissions, and to comply with the 15 July Order, until the recusal application and the applications for further information/disclosure had been determined.

By his order of 31 July 2024 (the “31 July Order”), HHJ Hacon ordered that time for Mr Costa to file submissions in relation to the recusal application and his applications for disclosure and further information was extended until 7 days after the final outcome of Mr Costa’s application to the Court of Appeal in relation to the 15 July Order.

Mr Costa appeals, with the permission of Nugee LJ dated 10 December 2024, against the 1 July Order, the 15 July Order and the 31 July Order, on the following grounds:

Nugee LJ refused permission on two other grounds (ground 4, that the judge erred in principle in concluding that the Defendants could prove the “new damage” at the liability trial, and ground 11, that the judge failed to provide adequate reasons). In relation to a further ground, ground 10, namely that the judge committed a procedural error by not adjudicating the application made on 30 July 2024 but instead extending time to file submissions that had already been filed, Nugee LJ adjourned the application for permission to appeal to the hearing of the appeal on the other grounds.

I will address the grounds of appeal in turn.

There are two aspects to ground 1: the judge was wrong not to determine the 1 July Application at a hearing; and/or the judge was wrong to determine it without allowing Mr Costa to make submissions.

The cap on recoverable costs in proceedings in the IPEC means that parties are unlikely to recover anything like their full costs on more complex applications. For that reason, the IPEC approaches applications with a strong emphasis on proportionality and minimising costs, and the procedures in relation to applications differ in important ways from elsewhere in the High Court: see Fox, Intellectual Property Enterprise Court, 3^rd ed., at §6-001.

The relevant rules are found in CPR Part 63, Section V. Rule 63.25, headed “Applications” provides, in paragraph (1), that CPR Part 23 (which applies to applications generally) applies to IPEC proceedings with the modifications set out in Rule 63.25.

Paragraph (2) provides that:

“Except at the case management conference provided for in Rule 63.23(1), a respondent to an application must file and serve on all relevant parties a response within 5 days of the service of the application notice.”

Paragraph (3) of that rule provides:

“The court will deal with an application without a hearing unless the court considers it necessary to hold a hearing.”

The default position in the IPEC, therefore, is that applications are dealt with on the papers. That is departed from only where the court considers a hearing to be necessary.

As I have already observed, the judge, in the recitals to the 15 July Order, noted that Mr Costa had requested a hearing, that the Defendants had resisted it, and that the court was of the view that the application should be determined on the papers to avoid any further waste of costs. Mr Costa had ticked the box on his application form, requesting that the application be dealt with at a remote hearing, but he had neither stated, nor justified, why it was necessary for the application to be determined at a hearing. In those circumstances, the judge’s decision to determine the 1 July Application on the Papers was one he was entitled to make under the relevant rules.

Part of Mr Costa’s complaint is that the denial of a hearing was contrary to his right under Article 6(1) of the European Convention on Human Rights, to a fair hearing. He submitted that, unless there are exceptional circumstances, Article 6(1) “implies a right to an oral hearing at least before one instance”, citing Salomonsson v Sweden [2002] ECHR 736, at §36.

As the Defendants submitted, however, Mr Costa’s Article 6(1) rights were not engaged in the context of his application to strike out the Defendants’ points of claim, because this did not involve any determination of his rights: see, for example, Micallef v Malta (17056/06) at §83 (in a case concerned with an application for an interim injunction):

“…Article 6 in its civil “limb” applies only to proceedings determining civil rights or obligations. Not all interim measures determine such rights and obligations and the applicability of Article 6 will depend on whether certain conditions are fulfilled.”

The 1 July Application could, if the judge had granted it, have determined the Defendants’ rights, but they were content to waive their right to an oral hearing.

Mr Costa’s complaint was not so much, however, that the judge dealt with the 1 July Application on the papers, but that he did so without giving Mr Costa the opportunity to make submissions on the application.

Whether or not Mr Costa’s Article 6(1) rights were engaged, principles of natural justice and fairness undoubtedly apply in the IPEC, and it would generally be contrary to those principles for the court to make an order against a party without giving that party any opportunity to make submissions to the court on the substance of the application.

Mr Costa’s problem in this respect, however, is that the judge did reasonably afford Mr Costa the opportunity to make such submissions, and he took that opportunity. His witness statement, filed with the application notice, spanned 66 paragraphs, and contained a mixture of evidence and legal submission. His reply witness statement spanned 54 paragraphs and again contained a mixture of evidence and legal submission answering the submissions made in Mr Harker’s witness statement filed on behalf of the Defendants.

Mr Costa made reference in the body of his reply statement to the “many authorities across common law jurisdictions” supporting his proposition that the heads of loss claimed by the Defendants were distinct types of damage that should have been pleaded and proved at the liability stage of the proceedings. He said he would produce these at the hearing of his application. Within the exhibit to that witness statement was a ten-page letter containing detailed legal argument on the point, with reference to authorities, including a case from Singapore which he said clarified “the issues of causation and quantum relevant to common law jurisdictions”. He opposed the application being dealt with without a hearing but said that, in the event that the court did not direct a hearing, he expected to need around 15 pages for his submissions.

Mr Costa’s case that he had not been given the opportunity to make submissions on the substance of the 1 July Application centred mainly on his contention that a witness statement should contain evidence, and not submission. He is clearly correct in this regard: both his and the Defendants’ witness statements should have been confined to matters of fact. The question is not, however, what should have happened but what did happen. I am satisfied, having regard to the totality of the material that Mr Costa placed before the court, that he was not only given the opportunity to make submissions on the substance of his application to strike out parts of the Defendants’ counterclaim, but that he took that opportunity. In particular, having received Mr Harker’s witness statement, he engaged with the arguments set out in it in his own reply statement.

In my judgment, the judge was entitled to take the view that Mr Costa both had, and had taken, the opportunity to make written submissions, albeit within his two witness statements. These addressed the substance of his argument that parts of the Defendants’ counterclaim were an abuse of process and/or in breach of a court order or rule (being the bases on which his strike out application was brought). The judge was not obliged in my view to give Mr Costa yet further opportunity to present his case.

Mr Costa contends that the judge erred in declining to exercise the jurisdiction under CPR 23.8(3). That rule applies when the court has dealt with an application without a hearing under Rule 23.8(1)(c) because it “does not consider that a hearing would be appropriate”. It provides that a party affected by an order made without a hearing “and without the opportunity to make representations” has the right to apply to set it aside. The Defendants contend that Rule 23.8(1)(c) is implicitly excluded by CPR 63.25 (set out above). I need not decide whether that is so, however, because, for the reasons given under ground 1 above, I consider that Mr Costa had (and took) the opportunity to make representations.

These grounds relate to the merits of the strike out application. Mr Costa’s application was made under CPR 3.4(2), sub-paragraph (b) (that the Defendants’ statement of case was an abuse of process or was otherwise likely to obstruct the just disposal of the proceedings) and sub-paragraph (c) (that there had been a failure to comply with a rule, practice direction or court order). The application was not made under sub-paragraph (a) (that the statement of case disclosed no reasonable grounds for bringing or defending the claim).

The Defendants’ points of claim in the quantum proceedings assert three heads of damages:

In his 10^th witness statement, Mr Costa contended that the Defendants were not entitled to seek damages for potentially lost sponsorship (the “Sponsorship Damages”) or in respect of an unfulfilled agreement with a sponsor (the “Centus Damages”). He contended that these were irrecoverable as the Defendants had not “put forward these alleged losses at the liability stage”. The Defendants, he said, had to establish causation, which is a matter for the liability stage, not quantum assessment. As to the Video Damages, Mr Costa contended that these exceeded the ambit of the permitted claim, per the 10 November Order, because they related to URLs disabled both before and after the specified date of 25 June 2021. Mr Costa’s defence asserted that no claim could be made for the Centus Damages because the Counterclaim was successful only in relation to those URLs disabled on or about 25 June 2021, on the basis of the takedown requests lodged in respect of the Disclaimer. That did not extend to the Centus Damages, because the Defendants had not provided any evidence at the liability stage that they were precluded from uploading videos for any relevant periods.

The judge addressed the substance of the strike out application in paragraph 6 of his reasons in the 15 July Order:

“The Points of Claim set out facts which, if accepted at trial, would be likely to lead to the conclusion that but for the takedown of the URLs in issue, the First Defendant would have received sums from third parties: either sums corresponding to the damages claimed as Sponsorship and Centus Damages, or alternatively lesser sums. I am entirely satisfied that the Defendants’ claims to those damages is not an abuse of process, nor likely to obstruct the just disposal of these proceedings. I am also satisfied that no rule or practice direction of the Court disallows such claims and that there has been no order of the court which disallows them.”

The “URLs in question” appears to be a reference to those disabled on or about 25 June 2021 (see paragraph 2 of the reasons in the 15 July Order). The judge does not appear to have addressed separately the “Video Damages” claim, and whether it was limited to damages arising after 25 June 2021.

At the hearing of the appeal, Mr St Quintin, who appeared for the Defendants, accepted that the Defendants did not assert claims in respect of videos taken down prior to 25 June 2021, and that they should not do so. In supplemental submissions filed after the hearing, however, he withdrew both points. He pointed to the Defendants’ response to Mr Costa’s points of defence in the quantum proceedings, in which it was contended that the judgment did not limit the damages claimed to those arising from the videos taken down on 25 June 2021. He submitted that the 10 November Order should not be construed as limiting losses to those arising from the takedown of videos on or about 25 June 2021. Even if it is to be so construed, he submitted in the alternative that the Defendants are nevertheless entitled to claim additional losses, on the basis that once a tort has been established at a liability trial, the assessment of damages may be wider.

Mr St Quintin accepted that the failure of Mr Costa’s strike out application did not prevent him from pursuing all of the arguments advanced by him (in the context of the strike out application) at the final determination of the quantum proceedings.

In particular, whether (as Mr St Quintin submitted in his written submissions after the hearing) the 10 November Order precludes the Defendants from claiming damages other than those resulting from the takedown of videos on or about 25 June 2021 is a matter which remains open to be determined in the quantum proceedings.

Whatever the merits of the substantive arguments advanced by Mr Costa against the counterclaim, I consider that the judge was right to refuse to strike out the counterclaim on either of the bases asserted by Mr Costa. Even if Mr Costa is correct as to the interpretation of paragraph 4 of the 10 November Order, the Defendants’ actions would not constitute the breach of a rule or order of the court and the arguments based on abuse of process raised issues of fact and law that were not appropriate to be determined on a strike out basis.

At the hearing of the appeal, it became apparent that Mr Costa’s real concern was to have a proper opportunity within the quantum proceedings to present his arguments in opposition to what he perceived to be the impermissible widening of the scope of the Defendants’ damages claim.

The arguments aired on the appeal served to demonstrate that there are good reasons to doubt that the final determination of the quantum proceedings can safely be undertaken on the papers alone. Aside from the legal issues raised, it became apparent during the hearing that the issues raised in the quantum proceedings include at least some substantial questions of fact: for example, whether the reason further videos were not uploaded after 13 March 2021 was because YouTube imposed a freeze on uploads as a consequence of Mr Costa’s actions, or because the Defendants took the decision, for other reasons, not to upload further videos. I return to this point below.

Mr Costa’s complaint under this ground is that the judge erred in declining to consider the application under Part 18, because it was not referred to on the face of the application notice.

This complaint is well-founded. The application notice stated, in the box under the heading “What order are you asking the court to make and why?”, “I seek an order in the form enclosed with this Application Notice to strike out parts of the Points of Claim…”. The attached order sought relief in respect of both the strike out application and the Part 18 application. The evidence of both parties dealt at length with both aspects.

In those circumstances, the judge should have addressed both aspects. At the very least, faced with a draft order which went beyond the strike out indicated on the face of the application notice, and parties who themselves clearly appreciated that the application covered both aspects, the judge should have clarified with Mr Costa whether he intended to limit his application to the strike out aspect before declining to deal with the other aspects.

The basis upon which the judge decided to exercise his discretion to award the Defendants their costs of the 1 July Application appears in the last recital to the 15 July Order: “…the Court being of the view that the Application is so lacking in merit that it constitutes unreasonable behaviour on the part of [Mr Costa]”.

In my judgment, that was not a conclusion that the judge could safely reach. Leaving aside the fact that the judge dealt only with one aspect of the 1 July Application (so there ought to have been an apportionment of those costs relating only to the strike out application), his reasoning did not engage with one of the key points made by Mr Costa, namely that the damages claimed went beyond the scope of the 10 November Order, which on its face limited recoverable loss to that suffered by reason of the takedown of videos on or about 25 June 2021. As I have noted above, the Defendants accepted at the hearing of the appeal that they could not claim damages arising prior to that date, and it was only after the hearing that they corrected the position, and contended that the 10 November Order should not be construed as limiting the recoverable damages in that way. The merits of this point cannot in my view to be described as “so lacking” as to justify a finding that it was unreasonable behaviour on Mr Costa’s part to make the argument on his strike out application.

The judge summarily assessed the costs to be paid by Mr Costa in respect of the 1 July Application at £2,500. The total claimed (less VAT, which it was conceded was not sought below) was £2,629.50. There was no attempt by the judge to apportion this to the costs of the strike out aspect of the application, and the amount awarded shows that no account was taken of the fact that a significant proportion of the Defendants’ costs of responding to the application would have related to the Pt 18 aspect. Had any costs order been justified (which it was not – see ground 7 above), the judge was wrong not to limit the costs payable to the costs of resisting the strike out aspect of the application.

Mr Costa’s contention under this ground is that the judge was wrong, on 29 July 2024, to make an order on Mr Costa’s application to stay aspects of the 15 July Order without having addressed Mr Costa’s application to recuse the judge.

In Mireskandari v The Law Society of England and Wales [2009] EWCA Civ 864, the Court of Appeal rejected a submission that a judge should not make further case management orders where an application has been made to recuse him, save in exceptional cases. At §34, Lord Clarke of Stone-cum-Ebony MR (with whom Longmore LJ agreed) said this:

“It appears to me that, as ever, all depends upon the circumstances. In such a case a judge should give careful thought to the question whether he should continue to make case management orders or whether it would be better not to do so until the recusal issue is resolved. This is because in a case where a judge subsequently decides to recuse himself, it may be right to set aside an order made in the meantime.”

In his application notice dated 19 July 2024, Mr Costa sought a number of orders, including (1) that the judge recuse himself and (2) that the 15 July Order be set aside (or stayed, along with the Order of 13 June 2024). It was also apparent, from an email he sent to the court, that Mr Costa intended to appeal the 15 July Order to the Court of Appeal. The court’s initial response (conveyed to the parties by email) was that no action would be taken on the substance of the application of 19 July 2024 until any appeal to the Court of Appeal had been determined. Mr Costa emailed the court again on 24 July, requesting that a formal decision be made by the court on his application to stay and/or set aside the 15 July Order, to avoid the Court of Appeal finding that he was appealing prematurely. In the same email, he asked that the recusal application also be dealt with, because if it were refused, it may necessitate another round of appeals. In further emails dated 25 July 2024, Mr Costa repeated his request that the court issue a “formal decision” dealing with the application to stay or set aside the 15 July Order before he lodged an application with the Court of Appeal. The court ultimately agreed, and the judge made his order of 29 July 2024.

In circumstances where Mr Costa was actively pressing the court to make a “formal decision” on his application to set aside or stay the 15 July Order, so that he was in a position to appeal to the Court of Appeal, I can see no error in principle in the court’s decision to make such a decision, before dealing with the recusal application.

Mr Costa’s application dated 30 July 2024 sought an extension of the time laid down in the Order of 13 June 2024 within which to file his final submissions on the quantum issues. The judge, in the 31 July Order, however, did not address that application at all. Instead, he made orders extending time for submissions in relation to the applications which were then outstanding (relating to recusal and for specific disclosure and further information) until after the determination of the appeal against the 15 July Order.

The Defendants accept that the judge was in error in not addressing Mr Costa’s application of 29 July 2024. Nothing of substance turns on this, however, since it is common ground that new directions for the filing of submissions in relation to the quantum proceedings need to be given following the conclusion of this appeal.

For the above reasons, I would dismiss the appeal on grounds 1, 2, 3, 5 and 9.

I would allow the appeal on ground 6, albeit the only substantive consequence of doing so is that Mr Costa ought not to be required to pay any further fee in respect of the application for further information and specific disclosure. It is common ground that the application remains to be addressed within the quantum proceedings.

I would also allow the appeal on ground 7, with the consequence that the judge’s costs order in the 15 July Order is set aside. Ground 8 does not arise therefore for separate consideration.

As to ground 10, which relates to the judge’s failure to deal with something, rather than any error in what he did order, I would grant permission and formally allow the appeal, but there is no need to make any further order, as it is common ground that new and revised directions will be required for the filing of submissions by both parties.

If the other members of the court are in agreement with the outcome, the case will be remitted to the judge to consider, in the first place, the recusal application. Depending on the outcome of that application, either the judge, or another judge, will need to give directions for the disposal of the quantum proceedings. Although the Order of 19 January 2024, which provided for quantum to be determined on the papers, was made by agreement, it is clear, for the reasons I have explained above, that the circumstances have changed considerably since then, and – although this is a case management decision that will ultimately need to be made by the judge in the IPEC – it is difficult to see how a final determination of the quantum of the Defendants’ claim can be made without a hearing. The case will need to be listed therefore for a case management conference, for further directions.

I agree with the judgment of Zacaroli LJ save in relation to ground 7. I agree with Zacaroli LJ that the judge’s order for costs was flawed in so far as it failed to apportion costs between Mr Costa’s strike out application, which the judge dismissed, and Mr Costa’s application under CPR Part 18, which the judge did not deal with. Subject to that, I would dismiss ground 7.

CPR rule 62.26(1) provides that the court will reserve the costs of an application to the conclusion of the trial unless paragraph (2) applies. Paragraph (2) provides that, where a party has behaved unreasonably, the court may make an order for costs at the conclusion of the hearing. Unreasonable behaviour is therefore the threshold for the making of an immediate costs order rather than one at the conclusion of the proceedings. The purpose of these rules is, on the one hand, to streamline proceedings so that all costs issues are dealt with together at the conclusion of the proceedings, and on the other hand to provide a mechanism to prevent procedural efficiency being undermined by unreasonable applications.

It is well established that first instance courts have a wide discretion when it comes to costs. Furthermore, the decision under rule 62.26(2) is essentially a case management decision as to when costs will be dealt with. The judge was in an unrivalled position to take that decision in the present case for two reasons. First, because of his long experience as the Judge in Charge of the Intellectual Property Enterprise Court. Secondly, because of his previous experience in managing the proceedings.

In my judgment it was open to the judge to conclude that Mr Costa had behaved unreasonably in making his strike out application. The fact that Mr Costa’s arguments have real prospects of success at the trial of the damages inquiry does not in my view undermine that conclusion. The judge was entitled to consider that it was unreasonable for Mr Costa to make the application because: (i) it is not clear that Mr Costa is right, which is why this court is upholding the judge’s decision to dismiss the strike out application; (ii) the making of the strike out application generated additional and unnecessary costs for the Respondents; and (iii) the making of the strike out application required the expenditure of scarce court resources to the detriment of other litigants.

I agree that, for the reasons he gives, the appeal should be allowed to the extent explained by Zacaroli LJ. With regard to the single point on which Zacaroli LJ and Arnold LJ differ, I agree with Zacaroli LJ that the appeal should be allowed on ground 7.

As Zacaroli LJ has explained, the judge awarded the Defendants their costs of the 1 July Application on the basis that it was “so lacking in merit that it constitutes unreasonable behaviour on the part of [Mr Costa]”. In arriving at that conclusion, the judge will not have taken account of the application under Part 18 with which he did not deal. That, as it seems to me, means that we should reconsider for ourselves whether a costs order against Mr Costa was warranted, and my own view is that it was not. Not only did Mr Costa’s application encompass the unresolved request for further information but, perhaps more importantly, Mr Costa’s contention that the damages claimed went beyond the scope of the 10 November Order was not so devoid of merit as to establish unreasonable behaviour.